Help to Buy Redemption Advice Hampshire & Surrey

Help to Buy Redemption Advice — Hampshire and Surrey

The Help to Buy equity loan scheme closed to new applicants in March 2023, but tens of thousands of Hampshire and Surrey homeowners who purchased between 2013 and 2023 still have active HTB equity loans. Those who purchased in 2018–2019 are now in or approaching their year 6, when the government begins charging interest on the equity loan for the first time. The year 6 interest charge starts at 1.75% of the original equity loan value and rises annually by CPI plus 2%. This charge does not repay the loan — it is an ongoing cost on top of your mortgage. The most effective solution for most HTB borrowers is to redeem the equity loan and remortgage the full remaining balance simultaneously.

Understanding the Year 6 HTB Charge

Worked example: you bought a £280,000 Basingstoke new build in 2018 with a 20% HTB equity loan of £56,000. For 5 years you paid no interest on the £56,000. In year 6, the government charges 1.75% of £56,000 = £980 per year (£82/month). In year 7, the charge rises by CPI plus 2%. At 5% CPI plus 2% = 7%, year 7 charge is £1,049. By year 10, assuming 5% annual increase, the annual charge is approximately £1,280. The charge escalates every year and never repays any of the original loan. The only way to stop it is to redeem the equity loan.

How to Redeem Your Help to Buy Equity Loan

HTB equity loan redemption requires: a current RICS valuation of the property; payment of your percentage share of the current valuation (e.g. 20% of current value if you took a 20% HTB loan — not 20% of the original price); and a solicitor to handle the redemption with Homes England. The redemption amount is based on current market value, not the original purchase price. A £280,000 Basingstoke property purchased in 2018 now worth £360,000 requires a 20% redemption payment of £72,000 — more than the original loan amount due to property price growth.

Remortgage to Fund HTB Redemption

Most Hampshire and Surrey HTB borrowers do not have £56,000–£80,000 in savings to redeem the equity loan. The most common solution is a remortgage that raises the capital to redeem the HTB loan simultaneously. On the same Basingstoke property: current value £360,000, existing mortgage £168,000 (75% of original £280,000 minus 5 years of repayments), HTB redemption required £72,000. New remortgage of £252,000 (70% LTV on £360,000) funds both the existing mortgage repayment and the HTB redemption. We handle the remortgage application and coordinate with the HTB redemption solicitor simultaneously.

Hampshire and Surrey HTB Properties — Year 6 by Postcode

The Hampshire and Surrey HTB market was concentrated in specific new build areas. Basingstoke (RG21/RG22): large HTB volumes on Brighton Hill, Hatch Warren and Chineham developments 2014–2021. Andover (SP10/SP11): Picket Twenty development was predominantly HTB 2016–2021. Farnborough (GU14): GU14 new build on the Queensmead and town centre sites. Deepcut (GU16): the regenerated garrison site had significant HTB volumes 2016–2021. Fleet (GU51): Elvetham Heath fringe and Fleet South sites. Winchester (SO23): Bar End Park and SO23 southern edge developments. If you purchased a new build in any of these areas in 2016–2021, your year 6 charge date is 2022–2027 and you should be reviewing redemption options now.

What Happens If You Do Not Redeem

The HTB equity loan does not expire. The interest charges continue indefinitely at an escalating rate. When you eventually sell the property, Homes England receives its percentage share of the sale proceeds — if values have risen, they receive more than the original loan. The longer you leave the redemption, the higher the charges become and the more of any future price growth Homes England participates in. Early redemption, funded by a competitive remortgage, is the financially optimal strategy for most HTB borrowers who have sufficient equity.